The South Korean government said on June 25 that its economy is likely to shrink 1.5 percent this year, revising upwards its April projection of a minus growth of 2.0 percent.
The growth outlook for 2010 remained at the same level as two months ago, a 4.0-percent advance.
The recent upgrade came amid increasing signs that hint at stabilization in the local economy, on the back of massive expansionary policies, the government explained.
"Thanks to stabilizing financial markets and expansionary macroeconomic polices, some indicators are showing signs of improvements," South Korean Finance Minister Yoon Jeung-hyun told a press conference.
As for reasons behind the growth outlook revision, he pointed to the nation's economic growth turning positive in the first quarter and expectations for a full-swing growth amounting.
With the government's extra budget worth 28.4 trillion won (22.1 billion U.S. dollars) and the central bank's fixing the interest rate at 2.0 percent for seven consecutive months, the South Korean economy grew 0.1 percent in the first quarter, from three months earlier, relieving market jitters that the economy is falling into a deeper recession.
The Organization for Economic Cooperation and Development (OECD) on Wednesday said that it revised up its 2009 growth outlook for South Korea, from minus 2.7 percent to minus 2.2 percent.
The International Monetary Fund (IMF) also said it will likely move upward the growth outlook for the country.
However, the South Korean government, along with local and international think tanks, warned against hasty optimism on the rebound of the economy, as there still remain pessimistic factors, such as sluggish investment and employment.
"We will maintain our expansionary economic policy for the time being until a full-swing recovery is taking place," Finance Minister said, stressing that the government's macroeconomic stance will depend on the pace of an economic rebound.
Source:Xinhua
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